Floriculture supply chain to woo customers

The dominant position that the Netherlands occupies in Europe’s floriculture supply chain is coming under pressure as a result of diminishing returns and changes in consumer habits. To retain their leading position, the various players in the supply chain will be forced to cooperate, to allow them to respond quickly to new market developments.

By sharing data about buying habits and consumer preferences, they will be better able to anticipate the wishes of specific target markets and their moments of consumption. Analysing big data and exchanging information within the supply chain may enable a better match between supply and demand and improved strategic choices. This is the conclusion that ABN AMRO presents in its report 'Colourful opportunities for the floriculture supply chain' (Dutch only) that was published earlier today.

Opportunities arising from emotion and impulse

The returns in the floriculture supply chain have been under pressure for a number of years. Consumers have become more reluctant to spend their money on plants and flowers. The sector is moreover facing competition from foreign floriculture products, and bouquets have to compete with other gift options such as wine, perfume and gift vouchers. Consumers have difficulty distinguishing the quality of plants and flowers. At the same time, consumers’ buying habits can also be unpredictable. Although the moments of consumption are often very different, for most people plants and flowers have strongly emotional overtones. Another requirement for consumers is atmosphere and impression: not only at home, but also while shopping. The floriculture sector, ABN AMRO believes, can make use of the opportunities arising from emotion and impulse.

More than 8 out of 10 consumers regularly buy flowers, and 30 percent of them do so once a month. Almost three quarters of the respondents enjoy presenting women with gifts of floriculture products, compared with 19 percent when it comes to gifts for men. However, 67 percent of women and 37 percent of men enjoy receiving gifts of plants or flowers. What is remarkable is that 41 percent of young people also enjoy being given flowers. Women are more likely to buy flowers at the supermarket, and men from a florist. Moreover, more women (26 percent) than men (16 percent) feel that flowers are too expensive. Most people generally buy floriculture products in a brick-and-mortar shop, particularly consumers aged 60 and up (83 percent). A further 11 percent have made at least one online purchase during the past year, while 17 percent indicate that they only use the Internet to explore the options or as a source of inspiration. Most consumers expect a bunch of flowers to stay fresh for an average of 9.28 days; most guarantees in supermarkets, however, only offer 7 days’ freshness. By focusing on freshness – combined with the right conditioning and treatment – the supply chain can assure their consumers longer enjoyment of their plants and flowers.

Opportunities from supply chain partnerships

Every link in the supply chain can benefit in numerous ways from consumers’ expectations. A vital factor is that the separate parties in the supply chain need to work together and exchange their knowledge and market information. For example, the parties in the supply chain can utilise the extensive information inferred from consumer habits to tailor their products and concepts. ‘The purchase histories of consumers who regularly order products online yield information about important events in their lives and about their preferences. You can then use that information to target your offers. The freshness of products on the shelves also determines customer satisfaction. And the faster the product is in the shop, the longer the retailer can present it,’ explains Jan de Ruyter, Sector Manager Vegetable Sectors at ABN AMRO. ‘This is another area where the supply chain can improve. For example, coordinated software and RFID applications can be used to register where products come from and under what conditions they have been stored. Sharing this information creates possibilities for guaranteeing freshness and lifting quality to the next level.’